Opinion Pieces


Expanded gambling prosperity is a fairy tale for grown-ups December 7, 2013 by Richard Nelson

In the time of year when children stand in line to see Santa and share wish lists of Wii’s and Gameboys, a few adults get caught up in another perennial tale promising to bring comfort and joy. Hark, the Spirit of Casino Expansion once again has visited the Bluegrass.

Businessman Billy Harper confessed in a major Kentucky newspaper that he had been naughty for the transgression of failing to see the light and goodness that casinos would bring us seven years ago when he ran for governor. Now, dancing in Harper’s head are visions of jobs, economic prosperity, and a new revenue stream to build schools and roads.

Harper, who is part of a growing pro-gambling expansion coalition called Kentucky Wins!, is now convinced that gambling benefits society. Makes one wonder what  the elves are putting in the eggnog these days. It is unclear if Harper, a very successful businessman, has incorporated gambling principles into his own business practices.  Why not take some extra operating capital and put it on a roulette wheel? Or plug a few grand of seed money into a slot machine?

If gambling is an economic winner, why aren’t financial advisors telling their clients they should take some of their hard earned retirement portfolio and lay it down on the craps table? Why don’t teachers tell their students that gambling is a great way to make a living? After all, there are professional gamblers. “Bah humbug” you say? If those proposals sound ridiculous, why is it any more prudent for state government to encourage gambling amongst the populace and depend on their losses as a new revenue source?

Oh, that’s right, other states are doing it and they’re raking in Kentucky dollars hand over fist. They’re also stuck with the problems. Many casinos act like an economic black hole, sucking all the life out of a local economy. They did in Atlantic City, New Jersey where 40 percent of independent restaurants closed within a decade of expansion. Yes, they have huge hotels and a glitzy strip, but step a block away from the façade built on human losses and one enters a warzone littered with high crime and decrepit buildings. Atlantic City, far removed from the good society that we seek to achieve, is anything but the family friendly destination it once was.

The argument that the surrounding states have casinos and are prospering is like little Timmy whining  “but mom, all my friends are doing it.” Just because another state is doing it, does not mean it is right or even sound public policy. Nevada has legalized prostitution. Anybody ready to promote that in Kentucky?

According to University of Illinois Professor of Business Administration John W. Kindt "Gambling has a zero-sum economic effect in its market and, like legalizing cocaine, the socio-economic costs of legalizing gambling overwhelm the benefits." Kindt says that for every dollar of revenue generated by gambling, it costs taxpayers $3 in increased criminal justice costs, social welfare programs, regulatory costs and increased infrastructure expenditures. And then there’s the cost of those trapped in addiction. Two to four percent of gamblers are considered pathological or problem gamblers, costing society more than $10,000 according to  Baylor Economics professor Earl Grinols. Gambling isn’t so fun when one loses, and the Casino Scrooges could care less about the Bob Cratchit’s of the world  once they’ve lost it all.

The idea of building an economy on personal losses and transferring wealth without obtaining a new product or service, is akin to believing that Santa is at working 24/7 at the North Pole with his little helpers making toys for every good little boy and girl in the world. Policy makers who believe such things deserve a lump of coal in their economic stocking.

The economic Savior Kentucky seeks doesn’t wear a red suit and come down a chimney with a sack laden with presents. He was more likely born in a manger, received little fanfare, and because of the principles he eventually taught, never would have been courted by the casino lobby.

This opinion piece appeared in the December 23, 2013 edition of the Lexington Herald-Leader under the title: Ghost of casino envy revisting the state.



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